1. A Salary-Based Budget In this activity you will: choose a potential career path determine your take-home pay set aside money to pay yourself first try your hand at an independent adult’s budget and then reflect on the process of budgeting.

2. STEP 1: Take your Salary – Based Budgeting worksheet Write your name on your worksheet “LAST NAME, FIRST” Use your copy of the worksheet to record all the work for this project. Make sure to look for the light colored print in the last column

3. SALARY VS WAGE Salary = how much money you make per year $/year Wage = how much money you make per hour $/hour How do I get an annual income if my occupation has a wage? $ x hours x weeks in a year = annual income $15/hour x 40(hours worked in a week) x 52 weeks in a year = $31,000

4. STEP 2: Visit PayScale’s Salary Data & Career Research Center.Salary Data & Career Research Center To locate your future career’s salary: (your salary has already been given to you when you picked your carrer card) record the salary as your Annual Gross Wage on step 2 of your budget worksheet. – This is your income for the YEAR Then calculate your monthly income. Divide your salary by 12…. Multiply your wage by 40hrs and then by 52weeks Using the above website and the graphic organizer on pg 40, create a personal profile of yourself at 30 in that career. Type the career in the box and push SEARCH.

5. WHERE IS MY WORK/JOB? To do this go to google and type in “your occupation” in charlotte” Find a company to work for – record the company name Use this address as your work address You will need this information when calculating mileage to and from work etc….

6. STEP 3: Calculate your monthly Gross Wage. Gross Wage (monthly) = Annual Gross Wage / 12 Record on your budget spreadsheet. *While “wage” and “salary” are different (in how your are paid), for this activity both refer to the money earned from working **From this point on, you’ll use MONTHLY amounts for all budget entries.

7. STEP 4: Use the ADP Salary Paycheck Calculator to find your Net PaySalary Paycheck Calculator (the wage you actually take home each month, after deductions). To do the activity correctly: Choose North Carolina for the state you’ll be living in then use these values: Gross Pay = Your Gross Wage (monthly) → PER PAY PERIOD Pay Frequency = Monthly Federal Filing Status = single # of federal allowances = 1 Leave all other values as they are. Record “Net Pay” on budget spreadsheet under “Net Wage (monthly)”

8. http://www.adp.com/tools-and-resources/calculators- and-tools/payroll-calculators/salary-paycheck- calculator.aspx

9. STEP 5: “Pay yourself first” by putting aside a percent of your net (monthly) income into a savings account. Choose one of the percents below, and calculate how much you’ll be saving off your net salary. 5% → this is low, but better than nothing 10% → this is a good goal for your first career; increase later 15% → terrific savings goal! Savings = Net Wage (monthly) * % savings (remember 5% =.05) ***If you don’t make a whole lot of money, try and put something into savings – it’s better than nothing…..

10. STEP 6: It’s never too young to start saving for retirement. You want to set aside another portion of your net salary to put toward retirement. 5% → this is low, but better than nothing 10% → this is a good goal for your first career; increase later 15% → terrific retirement goal! Retirement = Net Salary (monthly) * % retirement (5% =.05) You can choose zero if you think you’re not going to have a whole lot to budget…..also consider your occupation, maybe you can retire early so you may want to put more into it!!

11. STEP 7: Calculate the total amount you’re saving each month. Total Monthly Savings = Monthly Savings Account + Monthly Retirement

12. STEP 8: Calculate the monthly amount you have to budget. **Savings is NOT an expense; it’s the money you’re setting aside for your own future. However, it’s also money that you shouldn’t spend on other things each month, so it gets taken out BEFORE you do your monthly budget. Monthly Amount to Budget = Net Salary (monthly) - Total Savings Step 8 = Step 4 – Step 7

13. STEP 9: RENT To determine how much you will spend on rent, choose the type of living situation you see yourself in. Option A: Live in an apartment/house by yourself Option B: if you make under$15/hour and did not choose a second job – you may live with 1 room mate Go to the slide for your choice to determine your rent cost.

14. STEP 9A: RENT (Live in an apartment/house by yourself ) If you want to live completely on your own, use the Rent Comparison Tool on RentJungle to calculate your Monthly Rent:RentJungle Look at your Monthly Amount to Budget and be sure not to spend more than 25% on Housing. Step 8 x 0.25 = max amount on rent a) In APARTMENT ADDRESS, input the city you would like to live in after college. b) Under BEDROOMS, select STUDIO OR ONE BEDROOM c) Under CURRENT OR LIKELY RENT, indicate how much you would like to pay per month. d) Select Apartment e) Find apartments that are in your price range. e) Choose where you want to live, what style apartment, and find a floor plan. Make sure you look at other factors, such as how close to work this might be….(to do this go to google and type in “your occupation” in charlotte” and use one of those addresses as your work address) e) Make sure to include a floor plan in your final product or pictures of the home you would purchase

16. STEP 9C: RENT (Live in an apartment/house with roommates) Option 3: If you make less than $15 an hour, you can live with roommates ($ saving!), use the Rent Comparison Tool on RentJungle to calculate your Monthly Rent:RentJungle Look at your Monthly Amount to Budget and be sure not to spend more than 25% on Housing. Step 8 x 0.25 = max amount on rent a) In APARTMENT ADDRESS, input the city you would like to live in after college. b) Select # of BEDROOMS based on total number of people living there (you + 1) b) Under CURRENT OR LIKELY RENT, indicate how much you would like to pay per month. c) Select Apartment e) Find apartments that are in your price range. d) Choose where you want to live, what style apartment, and find a floor plan. Make sure you look at other factors, such as how close to work this might be….(to do this go to google and type in “your occupation” in charlotte” and use one of those addresses as your work address) e) Make sure to include a floor plan in your final product or pictures of the home you would purchase Monthly Rent = rent price / # of people living there (max of 1 room mate…)

18. STEP 10: Renter’s Insurance You want to have renter’s insurance, to cover replacement of your belongings in case of theft or apartment-wide damage (flood, fire, etc). Unless you have a lot of expensive stuff, you can budget $20 for Renter’s Insurance. If your apartment is more than $1000/month your insurance is $30/month

19. STEP 11b: Utilities Cable/Satellite (Choose 1) Internet Home Phone Gas/Electric (If your apartment is less than 1000 sq feet, you can pay 2/3 of this price….) Cell Phone (Choose 1) You can also try googling “average cost of ___________ in Charlotte NC” – and examine the results Broadcast TV$0 Basic Cable$80 Premium Cable$125 Average Cost$60 Average Cost$20 Voice Only$50 Voice & Data$90 Average Cost$163

20. STEP 12: Calculate your total monthly budget for the cost of living. Cost of Living = Rent + Renter’s Insurance + Cable/Satellite + Internet + Home Phone + Mobile Phone + Electricity/Gas

21. STEP 13: Public Transportation (Buses, Trains, etc.) If you’re living in a city that allows you to get where you need via Public Transportation, and you’re not going to have a car at all, figure out how much public transportation for 1 month would be in Charlotte – google is your friend (don’t forget to use the annotated bibliography….) **If you will only use public transportation, skip to Step 18

22. STEP 14: Car Payment Use carmax.com to find a car – justify why you picked that car and pick the price, from the chart, that is closest to yours… If you’re going to have a car – use the web to find a specific good working car within your price range…, choose one of the following Car Payments (6 year loan, 5.5%): **If you are using public transportation, you pay $0 for a car $8,000 car -- $131/mo$10,000 car -- $163/mo$15,000 -- $245/mo $20,000 car -- $327/mo$30,000 car -- $490/mo$45,000 -- $735/mo

23. STEP 15: Car Insurance Assume between $100 (good rate, no accidents/violations, or less coverage(for a car less than $30,000)) and $250 per month (worse rate, accidents/violations, or premo coverage (for a car worth more than $30,000))-- you must be insured! STEP 16: Car Maintenance Assume $100 per month (if your car costs less than $15,000) – if your car is more than $15000 you should have no car maintenance… some months will be $0, but some will be expensive!

24. STEP 17: Gas Estimate how many miles you’ll drive per day and use this chart to find your gas prices (based on $2.10/gallon and 27mi/gallon): To do this – find a place in your city where you would work and use mapquest to estimate the mileage to and from your home Miles Per DayMonthly Cost of Gasoline 25$45 35$82 45$105

25. STEP 18: Calculate your total monthly budget for transportation. Cost of Transportation = Public Transportation + Car Payment + Car Insurance + Car Maintenance + Gas

26. STEP 19: Use a spreadsheet to plan your meals for 1 week….that means 3 meals a day for 7 days…(and maybe some snacks) Create a grocery list for your meal plan Groceries: Use Harris Teeter.com to build a grocery basket for a full week and add up all of the items. …multiply that price by 4.5 and you will get your monthly food budget.

27. STEP 20: Choose which plan you’re likely to follow for the cost of Dining Out: If you’re dining out any night of the week, make sure to adjust your meal plan and grocery list…. $10/meal$15/meal$20/meal$30/meal 1 meal/week$40$60$80$120 2 meals/week$80$120$160$240 3 meals/week$120$180$240$360 5 meals/week$200$300$400$600

28. STEP 21: Calculate your total monthly budget for food. Cost of Food = Groceries + Eating Out

29. Calculate the cost of your insurance STEP 22: Health Insurance If you are single: Average $999/yr Remember to divide by 12 to get the monthly cost STEP 23: Dental Insurance - $25/month (are you a dentist? Don’t need this insurance…..) STEP 24: Vision Insurance - $25/month (only need this if you legitimately wear glasses or contacts….)

30. STEP 25: Haircare If you already know how much you pay for a haircut, enter it. If you’re not sure, use the US averages: Men $28Women $44 **If you only get a haircut every 3 months, divide the cost by 3. STEP 26: Other Grooming/Hygiene Everyone’s different, but let’s assume $25/mo for men, and $50/mo for women, for other hygiene, medication, grooming, or personal needs.

31. STEP 27: Gym Membership Remember, the first step to wealth is health! If you don’t workout, or you do it free outside or at home, $0. Otherwise, assume $58/mo for a gym membership.

32. STEP 28: Calculate your total monthly budget for health. Cost of Health = Health Insurance + Dental Insurance + Vision Insurance + Haircuts + Other Grooming/Hygiene + Gym Membership

33. STEP 29: Student Loan Payments If you did not go to any post-high school schooling, or you somehow did so without any student loan debt, congrats on paying $0/month! Otherwise, choose your best estimate based on how much debt you’ll have when done with college or other post-high school education: (If you owe more than $50,000 your payment is automatically $650/month ) Debt$10,000$20,000$30,000$40,000$50,000 Monthly Loan Payment $115$230$345$460$575

34. STEP 30: Discretionary Spending So far, your budget is neglecting FUN STUFF (clothes, going out with friends, entertainment, new technology, gift giving, donations, travel, vacations, a morning coffee, etc). In the Wants category, record how much you’d like to be able to spend on these items (total) per month.

35. STEP 31: Monthly Spending It’s time to figure out how much you’re spending each month: Total Costs = Cost of Living + Transportation + Food + Health + Student Loan + Wants

36. STEP 32: Balance At the end of the month, how do your finances look? Do you spend less than you earn? You have a surplus, or money left over -- that’s good! Do you spend more than you have in your budget? You have a deficit, or expenses not covered by your earnings -- that’s bad! Balance = Monthly Amount for Budget - Total Costs If you end in a deficit ****DO NOT fix it**** this is to show a lesson and you can go back and reflect on what you could do differently and why….

37. Now that you’ve done the budget once through, you have a basic understanding of the components of a typical adult’s budget. Next, continue on to the Salary-Based Budgeting Reflection. Use your Salary-Based Budgeting Worksheet and this presentation as reference.Salary-Based Budgeting Reflection